Samwer Brothers Seek to Clone IPO Success With Rocket Internet

Jun 01, 2014 7:00 pm ET

June 2 (Bloomberg) -- Germany’s Samwer brothers, who have made a fortune replicating successful U.S. e-commerce businesses abroad, are about to take another page out of the tech billionaire handbook: going public.

Rocket Internet GmbH, founded by Alexander, Marc and Oliver Samwer in 2007, is preparing an initial public offering this year in Frankfurt that may value the company at more than 3 billion euros ($4 billion), people familiar with the situation said on May 30.

Rocket has hired Berenberg, JPMorgan Chase & Co. and Morgan Stanley to manage the potential listing, the people said, asking not to be identified discussing a private matter. Berlin-based Rocket, which calls itself the world’s largest Internet incubator with more than 75 companies including online retailer Zalando SE, is the latest e-commerce business to test investor appetite.

Alibaba Group Holding Ltd., the Chinese online marketplace founded by former English teacher Jack Ma, filed last month for what could become the largest U.S. IPO ever. The listing in New York could raise as much as $20 billion, which may make Ma the third-wealthiest in China, with $12.5 billion, and one of the 100 richest worldwide in the Bloomberg Billionaires Index.

“We focus on what’s best for the company and that is concentrating on our operations, in order to build a business for the long-term,” Andreas Winiarski, a spokesman for Rocket said on May 30. He declined to comment on a possible IPO. Representatives at JPMorgan, Morgan Stanley and Berenberg declined to comment.

Technology Stocks Fall

Food-delivery startup Just Eat Plc and King Digital Entertainment Plc, the creator of Candy Crush games, are among companies that have gone public this year, even as investors are cautious about how new businesses will generate profits. The STOXX 600 Technology Index has fallen this year in an otherwise rising market.

Twitter Inc., the messaging website that listed in November, has fallen to about $32 a share after peaking at $74 amid a slowdown in membership growth. Still, co-founder Evan Williams became a billionaire on paper on the first day of trading after the shares rose 73 percent.

Rocket and its ventures have received more than 2 billion euros in external funding, according to Swedish holding company Investment AB Kinnevik.

Cloning Capital

The Samwer brothers have a model of finding a promising Internet business in the U.S. and cloning it internationally. Since starting their first so-called dot-clone in 1999, a German version of EBay Inc., they’ve duplicated sites such as those of Airbnb Inc., EHarmony Inc. and Pinterest Inc. Zalando, a Zappos.com Inc. clone, is also planning an IPO this year, people familiar with the matter say.

Rocket starts companies, hires staff and provides marketing, design and management know-how until the fledgling company can fend for itself.

Known for putting Berlin’s startup scene on the map, the Samwers are also credited for sticking Germany with a reputation as the copycat capital of Europe. If both Zalando and Rocket go public this year, they will also revive IPO activity from Berlin, which hasn’t seen a sizable technology sale since Hypoport AG in 2007, data compiled by Bloomberg show.

--With assistance from Christopher Spillane in Johannesburg and Niklas Magnusson in Stockholm.